Going away to college brings a lot of excitement and enthusiasm, but it can also bring a lot of apprehension. Perhaps this is your first time living away from home, or maybe you're returning to school after several semesters of being independent. Living on your own means a lot of changes, including more freedom, but also the pressures of being an adult. Being a student often means living on a fixed income. A fixed income is where you have a set amount of money each month and “will go into the red” if you spend beyond that fixed limit. If you want to be able to enjoy your college days without having to worry about your finances, it's important to have a money-saving plan in place. With diligence, proper planning, and a lot of willpower, you will be able to get the maximum enjoyment from your money and won't spend your college days bored and broke.
The first step in creating a budget is to sit down and write a list of your monthly expenses. The most effective way to do this is to ask yourself a list of questions. Here’s a sample list of questions:
Next, consider how much, if any, money you'll want to set aside each month for non-necessary spending. Don't forget about expenses that might pop up only once a semester, such as textbooks or club dues. Set reminders in your phone's calendar so you don't miss any payments, and as a backup, keep a written calendar or planner that tracks your monthly payment due dates. Although the idea of keeping a paper datebook might seem outdated, it is a tried-and-true method for tracking your finances. Computer-savvy individuals might opt for an Excel spreadsheet instead. With all of this information organized, it will be much easier to create a sound money-saving plan.
If you have not filled out the Free Application for Federal Student Aid (FAFSA), do so immediately. The FAFSA is a master application that many colleges and universities will use to determine your financial aid eligibility. You should complete a new FAFSA prior to each academic year. Applying for loans, grants, and scholarships is much easier with the FAFSA filled out.
Also, being a student comes with many perks, and some of these are monetary. A lot of retailers and other types of businesses offer discounts for college students if you simply ask and show your student ID. Don't be afraid to take advantage of savings wherever possible!
If you have a paycheck or other regular source of income, one recommendation is to take 10% of the gross and put it aside for savings, regardless of other expenses. The idea is that eventually, you won't even notice the extra 10% coming out, but you will soon begin accumulating an emergency savings account.
A credit card is a useful tool to have in case of an emergency; however, credit card debt can be very difficult to get out from under. Accumulating lots of credit card debt at this stage of your life is extremely unwise. Debt can put a strain on your finances in the future, lowering your credit score and making it difficult to get loans when you need them. Therefore, only use a credit card when all other options have been exhausted. These rules may seem restrictive right now, but they will prevent a black mark from appearing on your finance sheet when you graduate. Also, these guidelines will be even more practical once you're navigating the real world outside of the university.
In addition to saving, there are also way to simply pay less for goods and services. Couponing is a popular way to spend less. For example, if you are putting together a grocery list, look at your local market’s circular and match up your list to the sales from the circular and any manufacturer’s coupons. This is a creative way to make your budget stretch farther. Shopping apps, including Instacart, make it easy to use digital coupons, allowing them to be loaded to your online account and automatically applied when you check out. Grocery store loyalty program may also offer these loadable coupons, but you’ll have to plan ahead and load the coupon offers that you want to apply before you shop.
Direct-mail and online coupons may also be available for outings. Keep an eye out for restaurant coupons and coupons for activities, like the movies or mini golf. Bigger chains may be more able to offer coupons on goods and services, but checking your local paper, a local coupon site, or a local social media page can be a great way to find coupons and special offers and support businesses in your area.
Let's face it: If you're in college, you're going to want to go out and have fun with your friends. Whether that's a festival or a night out at the bars and clubs, you'll want to enjoy activities with your friends, and this often requires money. Many individuals recommend only taking cash and nothing else, leaving your debit and credit cards behind. Although this is extremely restrictive, having a fixed budget will prevent you from overspending. For entertainment and shopping, you should also set aside a strict amount per month and not be tempted to use plastic. If you're running low on those funds in the first week of the month, you might need to step back from going out or find less expensive activities. Some additional helpful links are listed below: